11 Charged in Russian Military Procurement Network

According to the indictment unsealed in Brooklyn federal court, the procurement network began obtaining advanced, technologically cutting edge microelectronics from manufacturers and suppliers within the US and exporting those goods to Russia

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Eleven members of a Russian military procurement network operating in the U.S and Russia, as well as a Texas-based export company and a Russia-based procurement firm, are accused of illegally exporting approximately $50 million worth of high-tech microelectronics from the U.S to Russian military and intelligence agencies, federal prosecutors said Wednesday.

Alexander Fishenko, an owner and executive of the American and Russian companies, was also charged with operating as an unregistered agent of the Russian government inside the U.S. Fishenko was born in Kazakhstan and became a naturalized U.S. citizen in 2003.

According to the indictment unsealed in Brooklyn federal court, the procurement network began obtaining advanced, technologically cutting edge microelectronics from manufacturers and suppliers within the US and exporting those goods to Russia in October 2008, while evading the government licensing system set up to control such exports.

The microelectronics shipped to Russia have applications in a wide range of military systems, including radar and surveillance systems, missile guidance systems and detonation triggers.

Court papers say the network induced manufacturers and suppliers to sell them the high-tech goods, and to evade applicable export controls, by providing false end user information in connection with the purchase of the goods, concealed the fact they were exporters, and falsely classified the goods they exported on export records submitted to the Department of Commerce.

Prosecutors say the network’s principal port of export for the goods was John F. Kennedy International Airport.

U.S Attorney Loretta Lynch said Wednesday, “As alleged in the indictment, the defendants spun an elaborate web of lies to evade the laws that protect our national security. The defendants tried to take advantage of America’s free markets to steal American technologies for the Russian government. But U.S law enforcement detected, disrupted, and dismantled the defendants’ network.”

The individuals arrested are expected to appear in federal court in Houston, Texas today where the government will seek their removal to federal court in Brooklyn.

Prosecutors urged business owners who may have been approached by any of the defendants, or by someone trying to obtain export-protected, sensitive technology who appeared not to be legitimate to report that information to businessoutreach@leo.gov.